Report on merchandising

Page 1

Merchandising in Garments sector Introduction The textile and garments industry is booming in Bangladesh, especially after elimination of the global quota system. Presently India exporting garments to more than 70 countries including US, EU, Latin America, and Middle East. Last year, garments export was nearly $3500 million and about 700 million pieces. The main competitors of Bangladesh are countries like Chain, India, Sri-Lanka, Hong Kong, Thailand etc. The Bangladeshi garment industry is gaining ground in the world market at breakneck speed, but still not flourished at its fullest extent. Already the resources are available plentiful with a powerful foundation of fabric and spinning sector to support. The key factors behind this low technological development, lower output, cut throat competition, high raw material cost, inadequate infrastructure, traditional productivity, unfavorable regulatory policies, and globalization impact. However, there is a fair list of producers, suppliers, and exporters that are fully acknowledged with regulatory policies and formalities, international marketing policies and procedures. The only concern is in executing their productivity initiatives, and with order deadlines. Now days, major companies are adopting merchandising concepts, which comply with all procedures to execute and dispatch the shipment on time. Merchandisers are serious in the success of any garment retail business. They provide the right products at the right time, enabling a company to match with latest market trends and meet the market demand. In the merchandising concept, time management is a gig to manage one’s time properly, so he can focus on value adding actions. Today’s garments merchandisers have to move with frequent changes in demand and the developing technologies utilized in manufacturing and production. To find out customer requirements, they regularly visit retail outlets, and come up with latest updates from frontline staff. In order to keep an eye on developments in sourcing, site visits are made every week to mainland factories to meet suppliers and study production. In garment merchandising, there is no specific rule, so it’s important to able to think on one’s feet. Objective of the study It is said that, “where there is no objective, there is no way to do something.” So that is any task, objective less, is performed- like to run behind the “Luminous Marsh- Gas or Ray of False Hope.” So any task, whatsoever, should be performed depending on any specific objective. This study is not out of above concept. However, the objectives depending on which the research study will be performed are as follows. 1. Understanding sample order.

5. Solving shortage problem.

2. Managing order route production timetable.


3. Using route activities.




4. Submitting pre-production sample. Limitation of the study


6. To know the market demand & position. 7. To know about competitor. 8. Communicating with people and buyer.


Limitation of Data Merchandising is properly a practical matter. So there is no hues written data, journal, book about merchandising. Limitation of internet information In the website there is not enough proper data and documents about this topic. So it is very difficult to prepare a report on this topic. Executive summery Merchandising is a challenging job in the garments sector. Now its an adopting concept in garments industry. Merchandiser plays an important role in the RMG manufacturing company. Merchandiser has to understand the buyer’s requirements after receiving specification in the sample order. In many cases, there are modifications pertaining to the specifications in the order to dispatch on time and the right quality. He has to talk with the in-house veterans on the execution problems of sample orders, as the right information is required in decision making. Merchandiser has to manage every single production schedule and order route card that helps to follow-up the execution in the planned way. It is expected to be acknowledged various descriptions like: design, no. of modules, no. of operators, how many process, and date of dispatch, quantity, output capacity, and deadlines in the schedules. Merchandiser plans the activities depending on the essential or non-essentials, and top priority is given to the most essential tasks. In a daily schedule, merchandiser has to carry out and categorize is the most significant and urgent task. To get update on the current status on the order, the route cards should be utilized. The latest status can be fed into the computers. In case, the buyer ask for the goods prior to the deadline, then merchandiser has to reorganize the schedules to accomplish tasks, output capacity, no. of pieces to be produced daily, substitute arrangements, time availability, supply time, scheduling critical ratio, etc. The pre-production samples should be provided on time to the concerned buyers. Quality of the sample must be verified. If required revise sample should be made available to the buyers. Merchandiser should adjust to the required changes to demand by the buyers. In process inspection denote between any tasks in order-execution. Incase of non-confirmation, it is better to focus on the concerns of quality. Merchandisers that work on complete orders have to check deviation to the production teams so that any amendments can be done to avoid the non-conformities. The merchandiser should know about the pricing, consumption, sourcing to get the order. Merchandiser should know about the dearth of any commodity such as fabric, yarn, etc‌ from the beginning. Actions should be taken immediately to arrange required materials, after discovering the shortage. It is expected that merchandisers should verify the quality of goods prior to execution of the order. If the material is found unavailable, the superior should be informed about the concern. It is essential to communicate with the buyers regarding the order. It is expected to give some time to the buyer to read the sent messages. Merchandiser should to go through the messages received from the buyer and reply on time. In many cases merchandisers have to provide order status to the buyers.

Also merchandiser has to communicate with the people that are in-house, vendors, contractors and job workers. Only through the right communication can one meet deadline for the concerned orders. Methodology The method of the data analysis was divided into two parts. First I gather opinions of the Sr.Merchandiser by personal interviewing from the Islam Garments Ltd and analyzed data in my suggested way. Then I have presented the data of merchandising from merchandising division of Islam Garments Ltd. and other merchandising division in Bangladeshi garments factory. For collaborating the data and information collect through primary and secondary sources. I have also used quantitative & qualitative method that gives a view about Merchandise Management of our country. The major secondary sources are•

Merchandising Garments Ltd.

Audit report





Relevant books, Research papers, Newspapers and Journals

Internet & various study selected reports.

WHAT IS MERCHANDISING Introduction Formal and Universal Definitions Merchandising  Oxford Advance Learner’s Dictionary - The activity of selling goods, or of trying to sell them  Encarta Reference Library 2005, Dictionary –

Trade Commercially; to trade in or buy and sell products for profit

Market Products: to promote a product by developing strategies for packing, display, and publicity.

The Merchandiser A highly skilled individual who has to perform many functions. The most important of these are to: –

Make long-range plans and forecasts of sales, profit margins, and stock products

Keep accurate records of goods bought, sales, returns, transfers, and markdowns

Control the mark-up and margins, to cover expenses and to produce a profit in the buying budget

Maintain stock levels within a budget

Control what to buy and advice the buyer of what has been bought

Implement the company trading policy in merchandising terms, e.g. pricing policy

Assist with sales promotional activity by briefing relevant staff of stock assortments available

In reality vis-à-vis Bangladesh clothing industry Merchandising Handle, follow-up, and take responsibility of an order(s) from start to end or booking to shipment and beyond to the customer who placed it and for the company’s management. The Merchandiser A individual who acts as a coordinator, follows-up and takes total responsibility of an order form booking to shipment and beyond, for the customer who placed it and for his company’s management. Order  The order is the first ‘official’ document that the vendor will receive from the buyer (Customer). Every order describes the product and orders a certain quantity, at a negotiated price, to be delivered by a certain date.  As for a merchandiser, an order would be a project to manage from start to end and beyond, with trade-offs and targets such as performance, quality, time, & cost. A merchandiser should  Always work SMART, than hard.

 Be effective team players.

 Be very good Time Managers.

 Be able to adopt to change.

 Take pride on their work and not on their position.

 Be responsible.

Paradigm Shift…. In order to face the ‘Paradigm Shift’… •

You should always have a positive attitude and be discipline towards what we do.

Secondly, never say that you have a ‘weakness’, since this will only stop you what you dream to achieve. Nothing is impossible, from today on wards you call it an ‘Area for Improvement’ and work hard and more to improve it.

IMPORTANT  Positive attitude & Discipline  Time Management Skills

 MS-Excel (This is a key element in making a efficient merchandiser)  Filing (Systematically – all should follow on filing system – do all trim & swatch cards)  Transparency  T&A’s / Critical paths & Planning  Communication  Costing  Meetings  Others 1. Fabric / Trim booking charts.

3. Sample follow-up.

2. Material control and followup.

4. Shipment follow-up and recording.

Managing your Time 

Come to office to work, leave when you are done. Should not hanger around till late for some other person.

Punctuality at work

Use your computer more efficiently

Meet suppliers with prior notice

Do not ‘Procrastinate’ any tasks

Meetings to be held at planned times

MS-Excel (Spread sheet application) This is the key, if anyone can handle this application efficiently, they can do a days job in one hour. Filing, Trim cards, & Swatch cards o

Should be uniform


Should be neat & systematical, so any file could be referred or found easily during his or her absence.


Should omit the use of folders, everything should be filed.


QA, samples room, factory files should be prepared very clearly.


Trim & swatch cards should be very clear with all information and passed to relevant departments on time.

Transparency…  Very important aspect in order to deal with suppliers and customers smoothly.  Statements and payments should be clear, so balancing is easy.  Post costing should be done to know the real situation of the order.  Should issue a purchase orders for every purchase.  Instruct our suppliers also to deal in a professional manner. Costing  Costing for inquires – we must make sure that we give a price to a customer within 48 Hours after receipt of all details.  Pre-costing on orders – this could be your final costing on an order, once it’s confirmed.  Post-costing – this is very important, to see whether the order is profitable or not.  Costing responsibility will be on the merchandiser – in most cases the cost-sheet will be approved by finance department. T&A Control & Planning •

This is important to control the order from the initial stage.

T&A’s up-dated & meetings held.

Screaming when something is sliding or going offhand.

Making it practical and easy to follow.

Planning production & sampling base on the T&A.

Standardizing and customizing.

Communication  Better communication will lead us to understand our customers much better and give them in return what they really expect.  Replying messages promptly.  Training  Improves Proactiveness Meetings  Planning meetings  T&A meetings

 PP meetings Sample Follow-up  The sample flow of a order should be followed by the merchandiser and he is totally responsible for it.  Once again, you should stick to the T&A to make sure the samples are approved on the given time frame.  Make proactive decisions if something is going wrong.  All sample comments has to be read by the merchant and should be discussed with the sample room in-charge before passing a copy.  On this you have to work as a team, than passing the ball, since you know the order better than the sample room. Global Supply Chain

Defining the Supply Chain Is an integrative approach to dealing with the planning and control of materials and product flow from suppliers to end-users? Supply chain management represents a network of firms interacting to deliver a product or service to the end customer, linking flows from raw material supply to final delivery. History of Title & Buzzwords

As the elements involved in SCM increased, so do its title & buzzwords changed. The emergence of the concept of managing a process can be dated roughly as:

1975 Buying & Stock Control

1985 Quick Response

1980 Merchandise Control

1990 Efficient Response


1995 Supply Chain Management Participants •




Processes •

Demand, Planning, and Forecasting

Manufacturing and Assembly




Planning •

Demand Forecasting

Manufacturing planning

Inventory Simulation

Transportation Scheduling

Execution 

Order processing


Production & Assembly


Part of the Supply Chain •

Performance control – How well has the supplier matched the instructions?

Supplier compliance – Has the supplier followed the instructions?

Supply chain visibility – Can the retailer see what the supplier is doing?

Collaborative management – Treating the supplier as a genuine partner & the supplier too been passionately devoted

‘Three Ts’ that Enhance Value & Reduce Costs •




Trade Offs •


Lead time




A trade-off usually refers to losing one quality or aspect of something in return for gaining another quality or aspect. It implies a decision to be made with full comprehension of both the upside and downside of a particular choice. Additional Tasks 





Procedures & Systems •

Purchase orders placed

Purchase orders in manufacture against target supplier delivery dates

Merchandise dispatched by the supplier

Merchandise received at the retailer’s warehouse

Stock at the warehouse

Merchandise allocated to stores

Stock at stores

Flows •

Raw Material Flow

Information Flow

Finish Goods Flow

Financial Flow

Challenges (In the Clothing Supply Chain) Design-Sourcing-Manufacturing •

To Source, Design and produce clothing patterns, and prototype, the latest in-house, and then contract the production to the manufactures.

To place the company at the forefront of up to the minute design and innovation to attract more shoppers to the company’s stores.

To allow the supply chain to respond quickly to changing needs and circumstances.

To make proactive go/no-go decisions base on complete, and completely accurate, data.

High levels of control over stock movement, and enhance decision making in a highly dynamic environment though process visibility.

To develop strategic thinking and planning to occur months before the product reaches the stores.

Challenges (In the Clothing Supply Chain) Count...

Logistics •

Coordinating and controlling thousands of tons of clothing from manufacturing centers throughout Asia to the final destination, with a greater control and visibility as well as overall reduction in inbound logistics cost.

Maximizing the container utilization by consolidating a larger percentage and thereby reducing cost.

Also to implement value-added pre-shipment services, such as quality control and barcode scanning at origin.

Merchandising & Interdepartmental Relations (Manufacturing & Trading)

Operational Responsibilities  Critical Path / T&A Control.

 Planning and Prioritizing.

 Meetings held at the planned times.

 Relevant Documentation Completed & distributed.

 Availability & Accuracy of TecPacks.  Ensure Potential highlighted.



 Filing system.  Follow-up Actions.  Accountability.

Merchandising Department  Will do the Time & Action Control.  Will distribute all relevant details and information to all other departments.  Will co-ordinate with the sample room and QA’s to ensure smooth execution of the order.  Should always up-date all departments with information updates from the buyer.  Should up-date the customer on the orders.

 Raw Material ordering and follow-up Much more….. Production Planning  Booking, production planning, & shipment planning of all orders.  Finding sub-contract early if a ordered needed to sub-contracted & have the factory ready with sample approval etc..  Monitor daily production against planned targets and highlight if cannot meet delivery deadlines.  Following up on, TOP samples, production, carton samples etc.., since these are a must, if we are to ship the order on time.  Will push all departments to start the order as planned.  Will fill and send all following charts to customers, local officers, and other departments on daily / weekly / monthly basis, as requested. •

Daily / weekly production reports of all orders.

Shipment schedules / Plan for all orders.

Booking summaries and order summery sheets.

They will get all information from the Merchandising & Commercial departments.

Product Development Department  Product Development Manager and the Merchandising Manager will work together on all planning of samples for customers. Planning Manager and Production Managers will also join if necessary.  Will plan according to the sample request sheet from the merchant.  They will have a record in a master file for all customers on the sample comments / approval from fit to PP and maintain their own chart for easy reference.  They will directly complain to the management, if they are unable to do a sample on time, due to unavailability of materials / information.  The sample room plan and problems will be reviewed in the production meeting.  They could get the help of support services for Washing, fabric problems etc...  They will also sit with the QA managers and have the PP meeting, before a order is cut.  Consumptions for inquires and orders.

 They will maintain all samples with tagged from Fit to PP for all orders running, it’s better if they could maintain a log book for all samples. Support Services They will be the link between all departments (merchandising, product development and QA / Production) for support; they will work on following areas. a). Fabric Inspections. b). Washing. c). Inventory d). Shade Bands / Color Approvals They will also help the sample room to procure fabric / trims for development samples if necessary.

QA / Production Department  This department will handle the quality and report on the production to the office on all orders.  The QA Teams will be allocated customer wise, hence they will handle the order from the Fit Approval stage, so they will know better once it’s in production (Buying Office).  QA Managers will work closely with the Support Services during production, to control washing, fabric problems etc..  QA Managers are responsible for T&A control too, they will have to report issues to the management, if the T&A dates are not hit and discuss same at the production meetings, such as on, Production samples, Washing approval, Shade band approval, delay in Cut dates, delivery etc.. (Copies of the T&A will be given to QA managers by the Merchant)  QA Department will open their own file base on the T&A and start following-up on the orders and then get the relevant information / details from Merchant to complete the file before the cut date.  Will have their own PP Meeting with the factory staff before cutting of any order. HRD (Human Resource Development)  Training and development activities.  Counseling activities.  Absenteeism and turnover recording.  Sick room, first-aid, and maintaining of in-house accident register.

 Code of conduct and other disciplinary action.  Monitoring and recording of daily attendance, leave, etc...  Monitoring the Direct: Indirect ratio.  Grading, appraisals, & evaluations. Finance / Accounts  Will analyze the total expenses of the operations.  Prepare and work on a budget.  Should analyze the monthly expenses of each factory against exports (earnings), in order to determine the CM cost each factory should work on.  Should control material and cost, such as permitting to order only on management approved p/o.

Meetings…  Operations meeting (A meeting every month).  Production & Planning meeting (A meeting every week).  T&A Meeting (Every week, only within the merchandising department).  Pre-production meetings (A meeting before starting of each order). (Minutes must be taken on all meetings with an action plan & a person assigned)

Operations meeting..  HR / Personnel

 Engineering

 Housekeeping

 Shipping

 Security

 Training

 Transport

Production Meeting o

There should be a production meeting every week.


The main purpose of this is to high light the problems (All day to day problems) to the Top Management. The Director will chair the meeting.


There will be a summery of following maters to be discussed, Inspections, Sample, Planning, Merchandising Raw Materials, Production, & Shipments.


All problems will have to be high-lighted by relevant departments, so the Management could take action or speak to the customer on same.


Each department will get ready for the meeting on the previous day with all relevant information for the meeting (Preparation is very important).


Important – Do not cover anyone’s back, coz ultimately the company will suffer. This meeting is not to punish anyone; it’s to make sure that action is taken for issues upfront.

Discussed at the Production Meeting just some examples -

Inspections (Fabric) – Rejections and reasons


Samples – Delay’s and Rejections


Raw Materials – Delay’s why?


Production – Quality Problems and Delay’s


Shipments – Delay’s and Extensions


Only Problems - everything should be transparent and nothing hidden.

Pre Production Meetings  All departments will sit for the PP Meeting.  Should have a PP Meeting before cutting on every order / style.

 The main purpose of a PP Meeting is to review all information from all departments on the style and make sure at the end, that all important and relevant information and details are passed to the factory production line.  We should minute all Pre-production meetings and each department should have copy in the file (There will be a format to be filled for this).

These are a Must at PP Meetings  Approved Pre Production / Seal Sample  Approved Trim Card  Approved Shade Band  Approved Wash Standard  Fabric Inspection reports

 Inventory Reports  Fabric test reports  Fusing report  Final Confirmed Marker / YY’s  Completed Tec-files for QA Managers  Copy of the T&A

 When a order is in production...  It should be closely followed up.  We should give more attention and work hard on critical orders.  Each one of us should be proactive and work as a team to make sure quality goods are shipped on time.  Problems should be highlighted at a very early stage in order to avoid air freights.  Production and shipment recording should be standardized and up to date, so we don’t waste much time on reviewing same.  Should request buyer for help or extension at an early stage of the order.  We should all remember that we get paid only if the exports are done, so this must be taken very seriously. Confirming orders...  We must avoid very small orders, since we’ll not have any efficiency gain on them in production and we have to do the same sampling and the ground work as we do for a regular order.  We must consider the quantity, delivery, cost, efficiency, & productivity when confirming a order.

 Should avoid high risk orders.  Consider suitability of the order.  Should start to work with more up-market customers, so we could up-grade our operation too. Manufacturing or Trading...  First of all we could be very clear about our operation, are we ‘A Manufacture’ or ‘A Trading house’?  A Manufacture should up-grade his factory and go for up-market customers, since he will not learn or gain anything with customers who only confirm orders for cheap price. He should only take orders with a certain amount of GP on the pre-costing.  A trading company should only take orders if they have a remarkable margin, since most of the time in Bangladesh they take the risk, do all the hard-work, and have no gain at all, which should be avoided. Basically they do all the work for the factory until pre-production & then pocket-out the air freight when factories don’t keep their commitments.  A trading company is highly dependable on our vendors; hence they have to choose their vendors very carefully. They should have a consistent vendor base to do their orders round the year. Areas of improvement (General)...  Product Development – should be fast in turning a sample’s / YY’s around (Should have a fixed time).  Human resource – training & development  Strategy and Motivational meetings (By having this sort of meetings the staff could learn and be aware of what is expected from them)  Information Technology –  Meetings – We should have regular meetings, by doing this we could build the selfconfidence of our staff.  Follow-up activities – Production, QA, shipment etc... Should be done in the proper manner, more clearly and with easy traceability.  Past records and samples stored in a very organized manner.  Discipline  Transparency.  Filing Most of all, we should all discuss and continuously improve the system to avoid loopholes. Order Follow-up

Variables •

Controlled (Within our Control)

Uncontrolled (Not within our Control)

** It’s important that we understand and identify above.

Required Details & Information 

PO / Order Sheet •



Color & Size break-down

Ex-Factory / final inspection date

Fabric / trim details – colors, quality, requirement, etc..


Sample, sketch & color ways

Sample requirement

Workmanship details

Packing & shipping instructions

Opening the Master File •

Should be very neat and tidy.

Should always divide in to cages (with separators) for easy reference.

Should always have a file label with the relevant details.

E.g.. for Cage separation •



Sample follow-up


Buyer in-out

Po’s, PI’s, & Requirements

Suppliers in-out

Lc’s & Documents

Order details

Costing & correspondence


Fabric Suppliers  Confirmation of delivery date and issue of Performa-Invoice  Lab-dip approvals  Fabric quality approval  Wash standard approval

 Fabric Shade-bands  Fabric sample requirement  Pre-shipment test reports  Bulk fabric shipment  Payments

Trim Suppliers  Confirmation of delivery date and issue of Performa-Invoice  Color / Quality / Design approvals

 Pre-shipment test reports (If required)  Bulk shipments  Payments

 Trim sample requirement

Ordering (Fabric & Trims) •

Consumptions & requirements

Purchase orders

Requirement break-downs & workings


Price quotations

Payment terms / LC terms

Required quality standard / test reports

Important  All approvals – Before cut-date  Fabric – In-house before cut-date

 Sewing trims – In-house before cut-date  I.e. thread, labels, zippers, etc...  Packing trims – In-house before packing starts  I.e. Tags, tickets, poly-bags, hangers, cartons, etc... Trim Cards •

Details – Buyer, Po no., Style, Quantity, Manufacturing unit, Del date, etc...

Fabric – Swatch & thread (Color, Composition, & Consumption)

Pocketing / Contrast / Trimming – Swatch & Thread if any (Color, Composition, & Consumption)

Lining (Woven / Fusible / Non-Fusible)

Buttons – Buttons and attaching thread

Marketing – Labels & Tickets

Trims – Zippers, stoppers, cords, etc... (Length per size, width, etc...)

Extras & Comments

Tech Files •

Latest tech-spec

Copy of order sheet

Approved trim-card

Approved wash standard

Sample comments / alterations

Special important comments / messages

Copy of T&A

Suppliers that provides a Service 




Washing & blasting

Special hand work

** Above too have a flow, most importantly these are done on the garment while the garment is on production, and hence we should get all approvals in hand before the cut-date. Remember •

All requirements have to be double checked, since there is no room for mistakes.

Be extremely cautious when giving information to relevant departments.

Should always do your best to execute the order in the proper manner, since short-cuts and assumptions might be costly.

Risk Analysis What is Risk Analysis? •

A Systematic evaluation of every product is essential to protect our business from financial, manufacturing, quality and safety risks.

It is a continuous process, where each of these potential risks are clearly identified as early as possible and action taken to prevent and/or control.

Why does Risk Analysis have to be done? It will protect the business 

Risks are highlighted prior to bulk production

Can warn the customer of potential issues – amend the design at the development stage

Factory can carryout pilot-runs early / develop folders / obtain the correct machinery

Can use Risk Analysis to prioritize time

Safe guard factory from potential risks - a) New fabric suppliers - b) New fabric types - c) New processes – pigment dye

Recommended Stages of Risk Analysis •

Stage 1 -

Product Screening (1st Design Garment – Before you send the fit / style samples out)

Stage 2 -

Pre Contract Seal Risk Analysis (Before Contract Seal – Before you send the pre-production samples out)

Stage 3 -

Post Contract Seal Risk Analysis (Pre-Production – Before you start production)

Key Responsibilities •

Stage 1 - Product Screening Head of Merchandising

Stage 2 - Pre Contract Seal Risk Analysis

Head of Production / Merchandising •

Stage 3 - Post Contract Seal Risk Analysis Head of Production / Merchandising

Operational Responsibilities 

Critical Path / T&A Control

Meetings held at the planned times

Availability & Accuracy of Tech Packs

Ensure Potential Risks are highlighted

Relevant Documentation completed & distributed

Follow-up Actions


1st Tier: 8 Sections 1) Fabric / Lining / Interlining

5) Packaging & Labeling

2) Trims / Components

6) Laying Up & Cutting

3) Additional / Finishing Processes

7) Fit & Styling

4) Make Up / Design Features

8) Warehouse & Distribution

Risk Analysis Activities Fabric / Lining / Interlining •



Fitness for purpose

Past Knowledge



Wash & Wear Tests / Wearer Trials

Product Safety

Work Study / Engineering


Risk Analysis Activities, Additional Finishing /Design Processes •


Wash test / Wearer trial



Non iron

Past History

Garment dye

Wash Laundry


Product Safety

Make Up Features •


Product Safety

Fitness for purpose


New Design Features


Past history of design features


Wash test / Wearer trial

Packaging / Labeling •




Product Safety




Cutting / Laying Up •


Past history

Laying Up

Special Requirement


Product Safety

Wearer Trial

Fit / Styling •

Fitness for purpose

Wash tests


Past History

Product Safety

New Features

Warehouse / Distribution •


Cost / Freight / Duties


Product Safety


3rd Tier: Questions / Prompts 



Key Activity:

Questions / Prompts:

Pre Contract Seal Risk Analysis Make Up & Design Features Engineering / Work Study

Do we have the right machinery?

Do we require any new types of machinery?

Are there enough machines?

Are there special attachments needed?

The Risk Analysis Meeting 

Raise a Risk Analysis Assessment Form for every design / Tech pack

Brainstorm as a team – have relevant prompts / questions

All Risk issues recorded on the form with agreed actions, responsibilities and completion date

Ensure results are fed back into the system

On-going issues recorded for the next stage

Suggested Involvement at Each Stage 

Product Screening •

Product development / Design


Costing / Work Study

Garment Technology

Fabric Technology

Suggested Involvement at Each Stage 

Pre-Contract Seal Risk Analysis •


Product development / Design


Engineering / Work Study

Garment Technology

Fabric Technology

Quality Management



Continuous Improvement of the System 

Create a Questions / Prompt Sheet

Update it every season

Passed / Fail Designs – reasons

Passed / Fail Samples – reasons

Late Deliveries & Reasons (Air freights)

High Quality Costs (Repairs, Seconds)

Missed planned production start dates and reasons

High customer returns

Sourcing of Materials

Sourcing Fabrics and other raw materials for your apparel or sewn product contribute about 50-70% of the production costs or about 35-40% of the total wholesale price of apparel products. So, naturally, where you buy your raw materials (or "source" them) is of critical importance. Sourcing Options •

Producers (Mills, factories, etc.. Large producers will usually sell though through regional sales offices)

Distributors (Middlemen / Agent)

Converters (purchase fabrics from these mills and then print or dye the fabric [convert] before selling it)

Domestic, Off-shore, & Full Package Sourcing

Some materials are easier to find either domestically or off-shore

There are still advantages to domestic materials sourcing - Closer production contact and control, flexibility, shorter lead times, and less transportation, shipping, & commercial, costs. Full-package services - This is certainly a more convenient process, sourcing full package form one supplier, than dealing with different lead times from many suppliers. This reduces the shipping & financial costs. Importing "What you give up when you import, you give up flexibility and lead time. “ Internet Sourcing The internet has become an easy way to source fabrics. It is possible to search for types of fabrics by end uses such as apparel or upholstery, by fabric categories such as woven or knit, or by specific fabric types such as fleece or denim. Some sites simply list distributors, mills, or converters that offer particular types of fabrics, giving addresses or phone numbers, and offering Internet links if available. Cotton, Inc., maintains a site like this for sources of cotton fabrics. Examples of Internet textile distributors/retailers are:    Legal Requirements Standard procedures and customs for purchase, sale, and use of textiles are guided by Rules, codified in 1926. According to these rules, it is the responsibility of · The buyer to determine fabric / trim suitability to end use. · The fabric / trim manufacturer to provide serviceable products and information about quality and performance. There are several legal requirements for sewn products made from woven and knitted textiles that must be followed by the wholesaler and the sewn product producer of an apparel or home furnishing product. Here are the regulations to which you need to comply. Labeling  Fiber Content - generic fiber names and percentages by weight of each constituent fiber over 1% must be listed in descending order of predominance.  Country of Origin - Imported products must identify the country where they were processed or manufactured. Check the FTC website below for details concerning products made in more than one country or made in the U.S.A. of imported materials.  Manufacturer or Dealer Identity - textile labels must identify EITHER the company name OR Registered Identification Number (RN) of the manufacturer, importer, or another firm

marketing, distributing, or otherwise handling the product. An RN is a number issued and registered by the FTC and may be issued to any firm in the U.S. that manufactures, imports, markets, distributes, or otherwise handles textile, wool, or fur products ď Ž Care Labels ď Ž In addition, the Federal Trade Commission requires manufacturers and importers to attach care labels to textile wearing apparel. Full details of what should be labeled, what labels must contain, and how labels must be attached.

Sourcing by specification Your choice of materials will be different based on the styling and functional characteristics of your product, price point, expected sales volume, and business model (i.e. size and value proposition). Before you begin looking for fabric and trims, you need to thoroughly evaluate the functional and styling characteristics of the materials you are looking for and the price point of your final product. These vary widely, and a material that is appropriate for one product may be very wrong for another.

Cost The cost of materials often depends on the quantity that you buy and the payment terms. If you are willing to purchase more at one time, you may be able negotiate a lower price. If you are competing on price, low materials cost is especially important. If your value proposition is unique design, material costs may be a higher percentage of the total cost of the product. Payment Terms Always Inquire on the payment terms before you make a materials order. negotiated at the time of material purchase. They could be: •

COD (Cash on delivery)

TT (Telegraph transfer)

Payment terms are

LC’s (Letter of credits) – I.e. at sight, 120 days sight, etc..

As the business establishes a good credit record with specific vendors, credit terms are more likely. Discounts for quick payment & longer deadlines for payments. Lead Time

Lead time required for fabric / trim orders depends in part on whether the fabric / trim is a stock or whether it is to be made to specifications. Requirement Volumes •

Minimum yardage requirements (I.e. 1,000 yards per color)

Minimum order requirements (I.e. 500 pieces per size for tags)

Round-up requirements (I.e. in 50 or 100 round-ups)

Price slabs (I.e.

If quantity is 10,000 pcs Price: US$0.26/Dz If quantity is 20,000 pcs Price: US$0.23/Dz)

Quality Control Even with extensive specifications, quality of fabrics & trims are a critical issue. Textile manufacturers monitor fabric production as part of their own quality control systems.

Apparel manufacturers may test sample yardage before making large purchase commitments and also conduct either whole cloth or statistical sampling inspections when they receive bulk consignments. They must set up a system to carefully evaluate fabrics and trims as they are received. The process can be as simple as checking the order numbers and specifications, but the most thorough process includes a visual inspection of the fabric & trims for defects and some basic testing for content and performance. Independent Laboratories If a firm does not have the necessary equipment and expertise, independent textile testing laboratories can be hired to perform tests on samples of textile, apparel, trim and other materials for a fee. Some are:  MTL (Merchandise Testing Laboratories)  CTL (Consumer Laboratories)

 SGS  ACTS Testing Labs Inc.


 ETC Laboratories

“Quality surprises those are the biggest disasters.” Recourse Before purchasing, you should know all the guarantees, warranties, and return policies. It is wise to ask vendors questions starting with, "What happens if.....?" The responses will vary from "it's your problem" to "if you don't like it, send it back for a full refund." You may not change your mind about the purchase, but at least you will understand the consequences. If you have accepted fabric or trim that you find has a major quality problem, several recourse actions should be considered. First, if you have signed an agreement describing your recourse options, you can contact the materials vendor directly accordingly. “One of the lessons we've learned is we haven't signed enough paper ever, in any business transaction.” Grading Suppliers  Commitment *****

 Price **

 Delivery / Lead-time ***

 Reliability *****

 Developments / Samples ****

Produce to order or Stock? The trade-offs in the two options are times and inventory: Producing to order has relatively longer production time requirements after the order and low inventory requirements. Materials can be purchased after the order is taken and in the amount needed for the order. Finished-goods inventory includes only cancelled orders and mistakes. Producing to stock has short order-to-delivery time because the finished products are produced before the order is placed. But the inventory of finished goods is large. Costs of materials, labor, and warehousing are incurred before any orders are placed.


To Order

To Stock

Time: order-to-delivery Inventory

Long Small

Short Large

Services  Embroidery

 Washing

 Printing

 Sand blasting

 Cut, bead work, etc... (Above could be in-house or out-sourced) Shipment Terms

Shipping terms define who pays and when, since these decisions affect your cash flow?  FOB buyer means that the shipping is free-on-board to the buyer and that the seller pays.  FOB seller means the buyer pays. Shipping terms can be:  Part of the negotiation for each order  Based on terms your competitors use Based on terms that are most common in your industry Shipment mode How do you decide when to use:  Courier (DHL, UPS, Fedex, etc...)?  A trucking service or railroad?  Air freight?  Container on a ship? Logistics and Supply Chain Management Logistics is the planning for materials, production, orders and reorders, shipping, and inventory. Far from being an afterthought, logistics is the key to getting products to customers. Efficient organization and management of logistical systems can decide whether a company makes a profit or a loss. Logistics Approaches to logistics would be:  Cost effectiveness  Time saving  Customer involving

Technology Technology can help to:  Control your inventory  Shorten the order-to-delivery time  Use stocks

ď Ž Track orders for you and your customers Consumptions (Fabric, trims, & accessories)

How Much Is Enough?

Fabric Costs Calculating accurate fabric costs Article Summary: Fabric accounts for 25-40 per cent of the cost of making a garment, so controlling or negotiating fabric consumption has a significant impact on the bottom line. You Decide! Formulas

Or Technology This makes the biggest difference

Fabric consumption  Sample

 Details (Direction, Fabric way, etc...)

 Size specification

 Patterns

 Ratios (Size, breakdown)



 Fabric width (Finish / Cut able)  Marker (Efficiency)

Should consider 


Engineering (Production & Cutting)




Quality requirements




Net Consumption + Wastage % = Booking Consumption Wastage

For seconds / rejects (to cut extra)

Fabric structure / characteristics


Past history

Work on garment (Printing, embroidery, special trims, etc..)

Style difficulty

Wash Garments

Requirement for an order

Nature 100% Cotton twill (108*56/20 *16) peach finish









WastageRequirement Unit Price


3,900 1.85



7,576 $


$ 17,045.44


2,900 1.85



5,633 $


$ 12,674.81



1,600 1.85



3,108 $


$ 6,993.00



1,400 1.85



2,720 $


$ 6,118.88



$ 42,832.13

Fabric width  Cut able width 

Finish width

Saving Fabric

 Technology (CAD / CAM)

 Experience & past knowledge/history

 Tight QC for less rejects / seconds

 Good machinery

 Fabric inspection

 Skilled & trained work-force

 Controlling & monitoring production (Cutting only the sizes / colors that are rejected)

 Fabric Supplier

Trim Consumption Consumptions & requirements will be done same as per fabric unless it’s supplied in rolls or cut form.

Trim on garment

100% cotton, leather trim details, heritage screen-print graphics, handcrafted destruction details, stitch and repair details, patching, unique paint splatters, Premium Denim Wash, Accessories Add-ons to the garment - Consumptions and requirements depends on the type of the garment. (i.e. Jackets will have more accessories to deal with, while basic t-shirts will have very few accessories) Accessories on Garments

Consumptions – Accessories  Size, color, quantity breakdown of the order (Buyers purchase order)  Size specification (For zippers, elastic, etc..)  Detail sheet (Complete tech-spec) from buyer  Original Sample (If available) Should consider 






Quality requirements


Customer / Order

Requirement Consumption per Piece x Order Quantity (Pieces) b= Net Requirement

Booking Net Requirement + Wastage % = Booking requirement Wastage



Washing (Zippers, Thread, etc..)


Engineering (Attaching machinery, method etc..)

Internal controls

Past history

Requirements for booking •



Description or nature



Garment quantity

Wastage %

Break-downs for Booking Type of Order



P.O. No


Initial 1





Initial 1





Initial 1





Initial 1





Initial 1





Item 5 No Vislon Zipper 5 No Vislon Zipper 5 No Vislon Zipper 5 No Vislon Zipper 5 No Vislon Zipper Total

Type of Order



P.O. No



Initial 1





2cm Velvet Tape Total

Basic Costing What is the Cost

Stages of Costing  Inquires To make the decision to accept the order or not.


Size in Length


45.5 cm 49 cm 49.5 cm 51.5 cm 53 cm



86 171 233 171

Color black black black black black

Total Con/body Qty in cm yds




463 463

 Pre-Costing (Costing) To plan procurement and checking where we stand.  Post-Costing To see the real picture.

Knit •

Fabric type & weight (Single Jersey 155 gsm)

Basic measurement (1/2 Chest, Back length, & Sleeve length)

Fabric consumption (Kg’s per Dozen)

Sewing allowance

Fabric price (Per Kg)

Wastage (Cutting & Sewing – 10%, 15%, etc...)

% to produce more (3%, 5%, etc...)

For knits the fabric price and fabric consumption will have to be worked out separately. Steps

Fabric Price Fabric Cost-Sheet Yarn price - per KG

$ 2.56

Knitting charge - per KG

$ 0.17

Dying & Finishing charge - per KG

$ 1.40

Compacting Charge - per KG

$ 0.17

Brushing / Amarise


Others / GP - per KG

$ 0.70

Price of fabric - per KG

$ 5.00

Fabric Consumption


 Fabric type & weight (Single Jersey 155 gsm)  Basic measurements  Half chest  Back length  Sleeve length  Allowance  Wastage (Yarn to fabric)  Wastage (Fabric to garments)  Percentage to cut extra (3% more garments) Fabric Weight

Basic Measurements

Formula – Tee Shirts

(Back Length + Sleeve L + Allowance) x Chest x 2 x Fabric weight-GSM / 10000 x 12 / 1000 + 25% = KG per dozen

Basic Measurements

Formula – Pants

(Side Length + Allowance) x Thigh x 4 x Fabric weight-GSM 10000 x 12 / 1000 + 25% = KG per dozen Rib Consumption

A percentage is added to the total body consumption to calculate the weight required for rib collar •

Collar only – 5%

Collar + Cuff – 10%

Children’s – 10%

Long sleeve – 3%

Cost Sheet

Fabric cost

5.00 Kg


$ 5.30


$ 26.50

0.25 Kg


$ 5.30


$ 1.33

Total fabric cost


$ 27.83

Trim cost


$ 3.00



$ 1.00



$ 4.00

FOB per Dozen


$ 35.83

FOB per Piece


$ 2.99

Rib cost


Tips to be a good merchandiser •

Good command in English and adequate knowledge of technical terms for accurate and efficient communication.

Good knowledge of fiber, yarn, fabric, dyeing, printing, finishing, dyes, color fastness, garments production, etc.

Clear concept of the usual potential quality problem in the garments manufacturing.

Good knowledge of the usual raw materials inspection system and garments inspection systems.

Clear concept of fabric requirement calculation.

Good knowledge about accessories requirement calculations (e.g. thread, button, interlining, label, poly bag, carton etc.)

Good in fabric sourcing.

Good in accessories sourcing.

Need to communicate with the buyers & suppliers.

Clear concept about costing.

Clear concept about production planning.

Good knowledge about pre-shipment inspection schedule.

Clear concept about related shipping documents.

Need to proper overall follow-up. Chapter Four

Conclusion The position "Merchandiser" is playing a vital role in the RMG sector today. Merchandiser is the person who handles around 75% of the cost related to the garment & the production cost is only be almost about 25% of the garment. There by the role of Merchandiser in the apparel sector plays the most responsible part mainly for the financial benefit of the Company. The Merchandiser's small mistake will affect 75% of income of the order which will leads to a big disaster. This has to be understood by the Merchandisers seriously. We understand that most of the Merchandisers may technically sound enough. But the main lacking is that they are weak in "Management Skills". Our main Objective of this program is to open their eyes to areas where they are lacking & to give some important hints do their job in more effective way. Even the merchandisers those who are having experience, sometimes not clear about their exact job responsibilities. They have no proper order follow-up system to organize their day to day work. It is highly noted that all the Merchandiser's should improve the communicational skills strongly to make their job easier. Especially Merchandisers those who are working in the factories do not go to floor & other depts. to find out what is happening in the factory due to their faults. They wait until the factory people comes to them with the problem. Because of this reason most of the problems are arisen & take a lot of time to solve them. Therefore as a precautionary measure all Merchandisers must undergo training to learn to do their job very effectively in a professional manner. Through this training session, we will give the participants A FISHING ROD BUT NOT A FISH TO EAT TO NIGHT". Chapter Five Bibliography •

ApparelMerchandising: The Line Starts Here (by Jeremy A. Rosenau, David L. Wilson)

Understanding Textiles (by Billie J. Collier, Phyllis G. Tortora)

ApparelProduct Development (by Maurice J. Johnson, Evelyn C. Moore)

The Business of Fashion: Designing Manufacturing and (by Leslie Davis Burns, Nancy O. Bryant)

The Future of World Trade in Textiles and Apparel (by William R. Cline)

Textiles and Apparel in the International Economy (by Kitty G. Dickerson)


Journal, “Role of garments merchandiser”, Published date 24th April, 2009, Author name: Hilary Fernando, Managing Director, Osala Consultant Services.

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